A New Venture Fund Bubble?

These articles are becoming almost weekly, which implies that either there is another venture capital bubble — or that journalists are so bubble-fixated that they see them everywhere they look:

… the amount of capital out there has led to funds that, while smaller than the massive funds of the bubble years, are still larger than venture capital firms had planned. A few firms that have recently run into this issue are Montagu Newhall Associates Inc., which planned to raise around $100 million but ended up with $156 million for a venture fund of funds; Granite Global Ventures, which raised a $225 million fund that had a goal of $160 million; and Trident Capital, which closed a fund with $400 million in commitments, saying it saw demand for three times that amount.

As for company valuations, in the third quarter of 2004, the median pre-money valuation of venture-backed companies was $13 million, up from $11 million in the same quarter a year earlier, according to data from VentureOne, which like this newsletter is owned by Dow Jones & Co.

Related posts:

  1. A New Venture Bubble
  2. Performance Persistence at Venture Funds
  3. Why Venture Funds Don’t Want Your Cash
  4. Venture capital continues the slide
  5. Newbies Flood Venture Capital (Again)